Micron Threatens New DRAM Dumping Case

Micron Technology is threatening to file a new
DRAM dumping case against chip makers in South Korea, Taiwan, and
Japan.

In Boise, Idaho, a Micron spokeswoman confirmed reports by investment
analysts that the company "is seriously considering" filing its third memory chip
dumping suit in five years. Analysts said Micron told them in a conference
call last week that all other DRAM producers have been selling below cost
and many are liquidating large inventories driving down global prices
precipitously.

In a DRAM report issued last week, International Data Corp. of
Framingham, Mass., said Micron was considering new dumping charges. "If
Micron takes any legal action, we expect it will likely occur in the next month
just before the Korean and Japanese suppliers close their fiscal books," IDC
said.

Any Micron dumping suit potentially could cause a knee-jerk reaction in
some industry quarters to drive up the rock-bottom DRAM prices.
However, IDC summed up what most analysts expect: After the initial
impact, "market forces will begin to drive prices down again."

Sources said Micron wants to back up its earlier insistence that none of the
$57 billion global bailout in Korea end up financing further chip-maker
DRAM expansions during the persistent massive market oversupply.

Semiconductor analyst A. A. La Fountain III of Dominick & Dominick in
New York said it also believes Micron would like to force Taiwan DRAM
producers to curtail large capacity expansions, which the U.S. company charges
are unwarranted in the global market.

IDC reiterated the suspicion of many observers that Taiwan memory fabs
may try to ramp up to grab market share if Japan and Korea curtail their
DRAM capacity growth. A Micron dumping suit could possibly give the
Taiwanese second thoughts on such expansion if they are losing money on
DRAMs, some sources added.

Micron told the analysts that ironically, each of the three targeted countries
"would like us to file a dumping case against the others." All regions are
suffering from the continued DRAM capacity buildup -- but no country is
willing to cut back unless rival nations do as well.

Micron has an existing 5-year-old DRAM case still pending against two
Korean rivals -- Hyundai Electronics and LG Semicon. The Commerce
Department is expected to make a preliminary ruling in March whether the
two companies engaged in dumping during the 12-month period ending April 30,
1997.

Any new Micron DRAM suit would bring in Samsung Electronics,
which was dropped from the 1992 case, as well as the Japanese and
possibly Taiwan suppliers. It would also cover the period up to the end of
this year when the most drastic price cutting occurred.

Micron in March also filed an SRAM dumping suit against 20 Taiwan
producers and foundries and the three top Korean chip companies. Micron,
however, has been scaling back its own SRAM output. By contrast, the
U.S. memory chip has shot up to become one of the largest global DRAM
companies, and said it is one of the firm producers making any profit.